1. Chapter Seven
Customer-Driven Marketing
Strategy
Creating Value for Target
Customers
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2. Customer-Driven Marketing Strategy:
Creating Value for Target Customers
Topic Outline
• Customer-Driven Marketing
Strategy
• Market Segmentation
• Market Targeting
• Differentiation and Positioning
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3. Market Segmentation
Market segmentation is the process that
companies use to divide large,
heterogeneous markets into small
markets that can be reached more
efficiently and effectively with products
and services that match their unique
needs
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4. Market Segmentation
• Segmenting consumer markets
• Segmenting business markets
• Segmenting international markets
• Requirements for effective
segmentation
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5. Market Segmentation
Segmenting Consumer Markets
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6. Market Segmentation
Segmenting Consumer Markets
Geographic segmentation divides the
market into different geographical units
such as nations, regions, states,
counties, or cities
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7. Market Segmentation
Segmenting Consumer Markets
Demographic segmentation divides the
market into groups based on variables
such as age, gender, family size, family
life cycle, income, occupation,
education, religion, race, generation,
and nationality
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8. Market Segmentation
Age and life-cycle stage segmentation
is the process of offering different
products or using different marketing
approaches for different age and life-
cycle groups
Gender segmentation divides the
market based on sex (male or female)
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9. Market Segmentation
Segmenting Consumer Markets
Income segmentation divides the
market into affluent or low-income
consumers
Psychographic segmentation divides
buyers into different groups based on
social class, lifestyle, or personality
traits
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10. Market Segmentation
Segmenting Consumer Markets
Behavioral segmentation divides buyers
into groups based on their knowledge,
attitudes, uses, or responses to a product
• Occasions
• Benefits sought
• User status
• Usage rate
• Loyalty status
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11. Market Segmentation
Using Multiple Segmentation Bases
Multiple segmentation is used to identify
smaller, better-defined target groups
Geodemographic segmentation is an
example of multivariable segmentation
that divides groups into consumer
lifestyle patterns
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12. Market Segmentation
Using Multiple Segmentation Bases
• PRIZM NE classifies every American
household into 66 unique segments
organized into 14 different social groups
• These groups segment people and
locations into marketable groups of like-
minded consumers that exhibit unique
characteristics and buying behavior
based on a host of demographic factors
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13. Market Segmentation
Segmenting International markets
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14. Market Segmentation
Segmenting Business Markets
Intermarket segmentation divides
consumers into groups with similar
needs and buying behaviors even
though they are located in different
countries
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15. Market Segmentation
Requirements for Effective Segmentation
To be useful, market segments must be:
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16. Market Targeting
Selecting Target Market Segments
• Target market consists of a set of
buyers who share common needs or
characteristics that the company
decides to serve
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17. Market Targeting
Evaluating Market Segments
.
• Segment size and growth
• Segment structural attractiveness
• Company objectives and
resources
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18. Market Targeting
Target Marketing Strategies
Undifferentiated marketing targets the
whole market with one offer
– Mass marketing
– Focuses on common needs rather
than what’s different
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19. Market Targeting
Target Marketing Strategies
Differentiated marketing targets several
different market segments and designs
separate offers for each
• Goal is to achieve higher sales and
stronger position
• More expensive than undifferentiated
marketing
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20. Market Targeting
Target Market Strategies
• Concentrated marketing targets a small
share of a large market
• Limited company resources
• Knowledge of the market
• More effective and efficient
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21. Marketing Targeting
Target Market Strategies
Micromarketing is the practice of
tailoring products and marketing
programs to suit the tastes of specific
individuals and locations
• Local marketing
• Individual marketing
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22. Market Targeting
Target Market Strategies
Local marketing involves tailoring
brands and promotion to the needs and
wants of local customer groups
• Cities
• Neighborhoods
• Stores
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23. Market Targeting
Target Market Strategies
Individual marketing involves tailoring
products and marketing programs to the
needs and preferences of individual
customers
• Also known as:
– One-to-one marketing
– Mass customization
– Markets-of-one marketing
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24. Market Targeting
Choosing a Targeting Strategy
Depends on:
• Company resources
• Product variability
• Product life-cycle stage
• Market variability
• Competitor’s marketing strategies
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25. Market Targeting
Socially Responsible Target Marketing
• Benefits customers with specific needs
• Concern for vulnerable segments
• Children
– Alcohol
– Cigarettes
– Internet abuses
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26. Differentiation and Positioning
Product position is the way the product
is defined by consumers on important
attributes—the place the product
occupies in consumers’ minds relative
to competing products
– Perceptions
– Impressions
– Feelings
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27. Differentiation and Positioning
• Positioning maps show consumer
perceptions of their brands versus
competing products on important
buying dimensions
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28. Differentiation and Positioning
Choosing a Differentiation and
Positioning Strategy
• Identifying a set of possible competitive
advantages to build a position
• Choosing the right competitive
advantages
• Selecting an overall positioning strategy
• Developing a positioning statement
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29. Differentiation and Positioning
Identifying Possible Value Differences
and Competitive Advantages
Competitive advantage is an advantage
over competitors gained by offering
consumers greater value, either through
lower prices or by providing more
benefits that justify higher prices
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30. Differentiation and Positioning
Choosing a Differentiation and
Positioning Strategy
Identifying a set of possible competitive advantages to
build a position by providing superior value from:
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31. Differentiation and Positioning
Choosing the Right Competitive
Advantage
Difference to promote should be:
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32. Differentiation and Positioning
Selecting an Overall Positioning Strategy
• Value proposition is the full mix of
benefits upon which a brand is
positioned
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33. Differentiation and Positioning
Developing a Positioning Statement
• To (target segment and need) our
(brand) is (concept) that (point of
difference)
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34. Communication and Delivering the
Chosen Position
• Choosing the positioning is often easier
than implementing the position.
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